How Much is an Appraisal Fee When Buying a House in Arizona?
If you are buying a home with mortgage, your lender will require a home appraisal. A professional real estate appraiser’s job is to give an unbiased OPINION of value of the subject property. Typically, your lenders will order the appraisals to make sure the property’s value is worth more than you’re borrowing. It is also to protect home buyer from paying more than what is worth in current market conditions.
While the lender hires the appraiser, the buyer usually is the one who pays for the service, although some buyers may negotiate and get the seller to pay.
So how much does an appraisal cost?
While the cost of a home appraisal varies by the size and location of your home among other factors, generally you can expect to pay around $350 to $450 for single family home under 3,000 square feet in Phoenix area. Unique properties, large houses, and remote locations typically cost more to appraise.
When do you pay the appraisal fee?
Although appraisal fee is part of buyer’s closing cost, buyer will need to pay in advance. Most lender will require appraisal fee to be paid upfront when ordering the appraisal. Buyer can pay the appraisal fee with credit card.
The appraisal process
After receiving appraisal order from the lender, the appraiser makes an appointment to visit the subject property. The appraiser will walk through of the house to get an idea of the overall condition and room count. The appraiser will look at the age of the home and how it was constructed. The air conditioning/heating, plumbing and wiring will also be visually checked. They will take several pictures, both exterior and interior. The appraiser will also measure the inside of the house so that they can calculate the size (square footage) of the home.
Appraisal report
After visiting properties, the appraiser creates a report detailing the subject property. This 40+ pages report will include the appraised market value, any improvements being made and comparable properties. It will also shows the neighborhood characteristic and market trends.
Since lender is the one who order the appraisal, the report will go to the lender. Buyers are entitled to receive a copy of that report, lender will be responsible to provide the report to buyer. It is a good idea to read through the report, review with your Realtor and save a copy.
If home appraisal is higher than the sale price
If a house appraises at a value higher than the purchase price, the deal will move forward and continue to next step of the escrow process. Buyer will benefit immediately because buyer will have home equity instantly. For example, if you’re paying $200,000 for a home and the appraiser says it is worth $225,000, you instantly have gained $25,000 in equity.
If home appraisal is lower than the sale price
If the house is appraised at a lower price than the price you offered, buyer and the seller will need to abide by the contract you and your Realtors have negotiated. If your contract included an appraisal contingency, you can renegotiate the price with the seller or withdraw your offer and have your earnest money deposit returned. The appraisal has saved you from paying too much for the home.
Also read: What is a contingency when buying a home in Arizona?
Conclusion
Buying or selling a home is one of the most important and consequential transactions of your life. It’s important to make sure you have taken the steps necessary to get a fair price and that there are no surprises after the purchase or sale.
Swee Ng, Realtor and Resident in Phoenix East Valley specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.If you are looking to buy or sell your home in Phoenix or surrounding area, I would the the opportunity to be interviewed for the job. Contact Us today for complimentary and no obligation consultation. I hope that you will put my experience, knowledge, service and professionalism to work for you.
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